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Business Scoop » Future Drought Could Drain Primary Sector Profit


, finds a strong relationship between more intense future drought and drops in farm profit.
In the year 2100, our 10-year-old children will be 90 years old. Their children – our grandchildren – will be managing farms in a far more tricky climate than we have to negotiate today. Year on year drought is still uncommon in Aotearoa, giving farmers opportunities to recover – financially, mentally and environmentally. But uncontrolled climate change is likely to bring somewhat more severe and
far more frequent drought.
This research draws on 70,000 tax returns and temperature and soil moisture data, to understand the historical relationship between local weather and farm profits in both the dairy and sheep+beef industries. Controlling for prices and farm management, the research shows a clear effect. Extrapolating on the clear relationship, future climate change scenarios were tested to understand how much future farm profit might be under pressure, due to reduced soi ....

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